Economists doubt NFL claim about Super Bowl's worth

MIAMI — Boosters say a Super Bowl is worth $500 million to a host city, but many scoff at that notion.

As taxpayers consider a Miami Dolphins proposal to renovate the team's stadium, backers say look at the numbers: Without a reported $250 million in improvements, southern Florida could lose the Super Bowl and the nearly $500 million it puts into the economy.

But economists contend the math isn't nearly that simple — or compelling.

Instead, economists who study sports put its net economic value at less than $100 million. And they accuse the NFL of dramatically inflating the game's spending power for moments like this, when teams want governments to fund stadium expenses.

"If they weren't talking about the numbers as justification for big public subsidies, I'd let them say whatever number they'd want," said Victor Matheson, a Holy Cross economics professor who co-wrote a 2006 study titled "Padding Required: Assessing the Economic Impact of the Super Bowl."

His research shows that the Super Bowl's economic punch likely tops out at around $90 million, though it can dip lower for tourist destinations like Miami that already enjoy busy winters. His research found that in 1999, Florida's economy gained $36 million from hosting the Super Bowl.

"Not that you'd turn down $30 or $40 or $50 million for one of these events," he added, "but don't tell me its $400 million."

Using a formula based on tax and income data, Craig Depken, an economist at the University of North Carolina-Charlotte, estimated that the Super Bowl added about $58 million to Florida's economy in 2007.

"It's not nothing. It's not zero," he said, "but it's not nearly what the NFL says it is."

The debate over the game's value will heat up as Florida gets ready to host a record 10th Super Bowl on Feb. 7, and as the Dolphins and their backers press their case for a better stadium.

The team's lobbyist and chief executive met with state lawmakers on the issue recently, after a Jan. 7 unveiling of plans for a partial roof and about 3,000 new seats by the sidelines.

NFL and team executives say the renovations would let Dolphin Stadium compete with the fancier football venues that threaten Florida's Super Bowl dynasty — including the new $1.2 billion Dallas Cowboys stadium that will host next year's Super Bowl.

"The reality is with these new stadiums coming online, they're kind of outshining us," said Rodney Barreto, a partner in a Coral Gables lobbying firm and chairman of the local Super Bowl Host Committee.

He contends that without a commitment to improve Dolphin Stadium, Florida will lose its bid to host the Super Bowl in 2014 — a decision the NFL will make this summer.

Costly project is the issue

But is a Super Bowl worth a public works project costing $250 million, which is what tourism officials in Florida said they were told the stadium improvements would cost? That's 71 percent of the amount Miami-Dade is borrowing to build a new Florida Marlins baseball stadium in Miami, debt that will cost about $2 billion to repay over 40 years.

Organizers of Florida's Super Bowl contend that when the NFL championship was last at Dolphin Stadium, it attracted more than 100,000 visitors and generated $463 million across four counties, from Jupiter to Key West. That comes from a study by Sports Management Research Institute, a West Palm Beach company hired by the Host Committee.

The committee did not respond to requests to provide the full study, but an 11-page executive summary says the game generated $297 million in spending and an additional $166 million in indirect spending.

Kathleen Davis, president of SMRI and author of the report, did not respond to interview requests. SMRI's Web site touts its economic-impact reports as good investments: "This information can be used to assist in lobbying for local and state funding for your event."

As Super Bowl Sunday approaches, no one doubts the game will be a boon for Florida's tourism economy.

Room rates much higher

Hotels enjoy a surge in profits as they jack up room rates and require that guests book for multiple nights. In February 2007, the typical Miami hotel raised room rates by 25 percent, an increase credited largely to the game, according to Smith Travel Research. In addition to the higher rates, hotels cash in on parties and social events that come with Super Bowl weekend.

"We're doing the ESPN Golf Classic here. We're also doing a Fox Sports event and an NFL women's event," said David Feder, general manager of the Fairmont Turnberry Isle Resort in Aventura. "You always want a Super Bowl."

So how can anyone doubt that America's biggest sporting event brings with it a staggering amount of spending? Economists claim three main flaws in the Super Bowl boosters' calculations:

n Tourists flock to south Florida on Super Bowl weekend, with or without the game. While Super Bowl attendees pack hotels, the rooms would be pretty full even without the big game. February almost always finishes as the second- or third-busiest month of the year for south Florida tourism, which peaks in March.

In February 2007, the last time the Super Bowl came to south Florida, monthly occupancy levels for hotels actually dropped slightly from where they were in February 2006, according to Smith Travel Research.

Other tourists edged out

"People coming to the Super Bowl are displacing people that would come to Miami anyway," said Depken, the North Carolina economist.

n South Florida doesn't keep all of its Super Bowl windfall.

Even with hotels raising rates for game weekend, Marriott, Starwood and other national lodging chains enjoy much of that profit. Big spenders may tip more, but cab fares stay the same, as do menu prices, beach-chair rental fees and — perhaps most important — wages paid to workers in the hospitality industry.

Almost all of the money spent on the Super Bowl gets taxed at the local level, even if the profits head out of state. But those gains can get eaten up by the money that local governments spend on preparations and extra police hours for the game.

For instance, in February 2007, Miami-Dade collected $1.3 million more in hotel taxes than it did in February 2006. That's slightly less than the $1.5 million that Miami-Dade has agreed give to the Super Bowl Host Committee this year.

n The Super Bowl disrupts spending, too.

Monkey Jungle, a top tourist attraction in Miami-Dade, had assumed the Super Bowl would help business in 2007, but the park found that ticket sales dropped 50 percent on the Friday before the game and were off 20 percent that Saturday.

She said the park thrives on families and Europeans vacationing in south Florida, tourists crowded out by the Super Bowl's crush of room bookings and the high rental rates that come with them.

Advocates of the Super Bowl as an economic engine dismiss its academic skeptics as using complicated formulas to obscure the obvious. And they note that the reports bashing NFL figures bring the professors coveted media coverage as the big game approaches.

"It's dangerous to say these games don't generate economic impact," said Robert Canton, a director in PricewaterhouseCoopers' Hospitality and Leisure practice who focuses on sports and tourism. "It's not logical," he added.

Bigger spenders in town

Andrew Hertz, general manager of the Miami Seaquarium, said ticket sales will probably drop during Super Bowl weekend, but he hopes to make up the lost revenue by hosting corporate parties that week. And he's counting on the Super Bowl crowd spending more.

"I feel I'm going to do very well that week selling out Dolphin Harbor," Hertz said of the lagoon where customers pay $200 to swim with dolphins. "If you're going to the Super Bowl, you're going to head for experiences you can brag about."

Aside from economics, backers tout the Super Bowl as a priceless marketing moment as a television audience topping 150 million sees south Florida as the game's enticing backdrop.

Organizers of this year's Super Bowl promise even more tourism exposure since the NFL is playing its Pro Bowl all-star game in Dolphin Stadium the week before the championship, its first time outside of Hawaii since 1980.